As a result, he continues, landlords are meticulously scrutinizing every deal that comes up to make sure the tenant is someone they want to rent to. He says property owners are likely to be even more careful in the coming year because they're almost certainly going to have to bring rents down further. "If they're going to make a low deal, they're going to want to know exactly who they're leasing to. They want to be sure it's someone who's going to stay in place for the term of the lease," he states.

Bonnell predicts '09 will see a significant boost in the number of transactions because businesses can't risk putting off long-term decisions much longer. Unfortunately, he says, the overall market may suffer because many tenants will decide to contract or possibly shut down entirely, leading to continued rent declines and a growing amount of sublease space. "In 2009, tenants will start making moves, but they'll be looking for smaller, cheaper or more efficient space. They're looking to get costs as low as they can, and that's not going to be good for landlords," he says.

He expects the office market's woes to be exacerbated in the first half of the year by the completion of projects that were begun before the economy went into a tailspin. Feeney expects similar problems in the industrial market. "We have nine brand new buildings over 500,000 square feet that have come on line or are scheduled to come on line," he says. "Those nine buildings total five million square feet, and we have only a 30-million-square-foot base."

In Murphy's opinion, Phoenix is suffering even more than other markets because it's been the focus of so much speculative development and investment over the past several years. As he puts it, "We went higher, and we're falling a farther distance because we went up so high."

None of the three brokers anticipates significant improvement until late in 2010, by which point, they assert, all segments of the market will have bottomed out and a recovery can begin. In the meantime, they expect the situation to worsen. "In the first two quarters, you're going to see a big increase in commercial foreclosures," declares Bonnell. "The banks held off this year, but next year a lot of five-year balloon payments are going to come due and the refinancing's not going to be there. A lot of people are going to lose their properties."

Murphy agrees the first two quarters will be tough, but he thinks, things will stabilize after that. "The next 90 to 180 days will be most challenging times we live through," he says. "But I think after that, we'll start seeing some movement upwards as people start buying notes at 10 to 20 cents on the dollar. Sometime in middle of next year, we will bottom out. It doesn't mean we'll jump off the bottom and head skyward right away. But the market will begin righting itself and people will start laying the groundwork for a recovery to begin sometime in 2010."